Thursday, November 21, 2013

As many of you reading this will undoubtedly know, Syd Field passed away earlier this week. Syd was the original screenwriting guru. His book, Screenplay, published in 1979, was the first real how-to book on screenwriting and introduced the terminology of “three act structure” which is now the language Hollywood. Syd called three-act structure the “paradigm.”

Although it’s likely that Syd was familiar with the philosophies of Aristotle and the book The Art of Dramatic Writingby Lagos Egri (about playwriting), he primarily developed his theories by reading thousands of screenplays and asking himself: What do the good ones have in common? And what do the bad ones lack?

Screenplay and the follow up The Screenwriter’s Workbookwere two of the first screenwriting books I read. (I liked The Screenwriter’s Workbook better… it had exercises and if you did them, at the end of the book you’d have a screenplay).

One of the problems of being the first to do something like this is that others come along and expand and improve on what you’ve done. Screenplay looks a little unsophisticated today. It’s not the first book I recommend to new writers. But his books are the foundation of most contemporary screenwriting education – including the class I teach and this blog.

There are always people who resist the idea that you can teach any kind of art. Syd was criticized for dumbing down movies and making them more formulaic. (Recently the Save the Cat book came under similar criticism.)

I think such accusations are ridiculous. Knowing craft does not preclude creating art; in fact it enables art. Only the weakest of aspiring artists would think that knowledge could somehow squelch their creativity. Syd himself was flexible on his paradigm. He’d often say that you have to know the rules to break them.

Which doesn’t mean Syd’s theories and others that followed have never been used improperly. Much of the Hollywood development community has read these books. Trouble comes when they start to use the theory rather than their own judgment to evaluate screenplays and give notes.

But if you’re reading this blog, I’m guessing I don’t have to convince you of the value of learning craft.

An important thing that people tend to forget about three-act structure: it’s an analytical tool to discuss aspects of storytelling. There are no actual acts in feature films. Plays can have acts, separated by the curtain lowering, the lights coming up, and people going to the lobby for a drink. Television has acts separated by commercial breaks. But movies are a continuous experience.

Acts as Syd Field used them are different. They are a way to discuss different parts of a story and the requirements of those parts. He could have chosen different terms. But we needed some language to discuss what worked and what didn’t in screenwriting. Syd’s paradigm is not a formula to be followed, but a way to understand narrative.

Thursday, November 14, 2013

Last week I used the example of a “million dollar spec sale” to discuss a variety of contractual and business concepts important to a screenwriter selling a spec. Today I want to discuss similar concepts related to the other type of work screenwriters do: rewrites and adaptations.

In these situations writers are hired to do one or more drafts of a screenplay. This happens when you are hired to rewrite a spec that you sold. It happens when you are hired to write a screenplay based on an original pitch. You could also be hired to rewrite someone else’s screenplay or adapt a book, play, comic book, etc. From a contractual/business standpoint, all of these deals are pretty similar.

These are all “work-for-hire” deals. This is an important legal term that means the person hiring the writer owns the copyright of the resulting screenplay, not the writer. This can create an odd situation when a producer or studio hires you to rewrite a script that they optioned from you, and then fails to pick up the option (see last post for an explanation of options). In this case, the copyright of the script they optioned stays with you. But who owns the rewrite?

The answer is they do, but since they don’t own the underlying material, they can’t do anything with it. You can’t do anything with it either – you don’t own the copyright for the revisions (known as a “derivative work” in copyright lingo). If you added a clever line of dialogue in that revision, you can’t use it if someone else buys the original script. The unusable rewritten draft is often called a “sterile draft.”

There are two big categories of work-for-hire screenwriting deals: union and non-union. The screenwriters’ union is the Writer’s Guild of America (WGA). It’s actually two unions, WGA west and WGA east, but they negotiate the Minimum Basic Agreement (MBA) that covers screenwriters together. And they mostly work together – mostly. Which one you become a member of depends on which side of the Mississippi you live on.

The advantage of working under a WGA deal is you get the contract language in the MBA automatically applied to your contract. This guarantees you such important things as a defined credit process and residuals. If you work non-union, your attorney will have to negotiate all of that stuff themselves. They probably won’t get as good a deal as the WGA provides. And it will be up to you or your attorney or your reps to enforce your contract. If you work under a WGA contract, the Guild will help enforce it. You don’t want to be responsible for collecting the residuals the studio owes you. Note that once you become a member of the WGA, you aren’t allowed to work non-union.

Non-union deals can be whatever you negotiate, so I can’t really describe them. I’ll discuss how a typical WGA deal works and some of the concepts will apply to non-union work.

The standard work-for-hire contract used to consist of four “steps,” or pieces of writing that the writer would deliver. There would be a treatment, first draft, second draft and polish. If it was a rewrite, the treatment step may have been removed – but sometimes the producers would still want a treatment if the proposed changes were big enough.

Different producers and studios prefer different treatment lengths and formats. It’s best to discuss what they’re expecting before you write it. A draft is what it sounds like – you write a draft or do a revision of the previous draft. A polish is a smaller revision, tweaking dialogue or altering the way scenes play out, but is not supposed to involve big structural changes. Occasionally, though, the difference between a polish and a draft would get fuzzy.

There was also a thing known as a “producer’s pass” or “courtesy pass.” This was when a writer would finish a draft and give it to the producer before officially turning it into the studio. The producer would make some suggestions and the writer would tweak the draft before delivering it. The expectation was that the changes would not take more than a day or so to do. Technically this was against WGA rules, but because it wasn’t particularly onerous on the writer and generally helped the script creatively, everybody looked the other way.

Unfortunately there has been a trend lately to one-step deals. These are deals that only hire the writer for a single draft (or maybe treatment and draft). This is a bad trend for several reasons. First, it takes away the natural collaboration that resulted from a multi-step process. Now there’s pressure on the writer not to show anybody any work until it’s nearly perfect out of fear of getting replaced.

Worse, producers now often abuse the producer’s pass idea to get the writer to do multiple drafts without additional payment. The threat is: if you won’t do another draft for free, they’ll be forced to go hire another writer (ignoring the fact that you won’t get paid either way). It sucks and the WGA is trying hard to end the practice.

When you are hired under a step deal, you are usually paid in installments. The WGA requires that you be paid upon delivery of each step – treatment, first draft, etc. Often payment is also split so you get a portion upon commencement of the draft, and a portion upon delivery.

Or at least that’s the theory. Often in the business writers begin work with only a “deal memo” spelling out the important points of a contract to be finalized later. The actual negotiation of the details drags out for months. But everybody wants to move the project forward so you begin work. However when you ask about your commencement money, you’re informed that the studio can’t pay it until there’s a fully executed contract. Personally I make it a point not to deliver any writing until I receive my commencement money. Some writers will finish all their work and turn it in and still not have been paid for commencement.

If you’d like to look at the MBA (warning – it’s REALLY long) or the schedule of minimum payments, you can find them at the WGA website. Oh, and don’t forget that everything I said last time about paying commissions, union dues and taxes applies to work-for-hire contracts as well.

And always consult an attorney before signing a contract for writing services.

Thursday, November 7, 2013

You read in the trades that a screenwriter just sold a spec script for a million dollars. Lucky guy. That means he’s rich, right? Not quite. I’d like to use this hypothetical to explore how the business of being a professional screenwriter works.

Let’s assume the number quoted in the trades was accurate – never a safe assumption; people tend to exaggerate the size of deals. But even if the one million dollar figure is correct, it isn’t what the writer will be receiving immediately. Usually what’s reported is the total maximum value of the deal. Some of the money is guaranteed. Much of it won't be.

First, a lot of the money in a contract of this size will likely be in the form of bonuses. Often the writer receives a “production bonus” when a script goes into production. They may also receive “box office bonuses” if the movie hits certain box office thresholds. Frequently these bonuses are contingent on the writer receiving credit on the movie. Sometimes if the writer receives shared credit, the amount of the bonus is reduced. If this is a WGA deal (at this level it should be) then credit will be determined by the Guild. The good news is if the writer sold an original spec, then they are guaranteed at least a shared “story” credit.

For the purposes of our exercise, let’s say half the million dollars is in the form of bonuses. That means the actual sale price of the script is $500,000. Not bad, right?

It isn’t bad at all, but chances are the writer hasn’t actually sold the script. More likely they’ve “optioned” it, meaning they’ve entered into an option/purchase agreement. With these agreements the buyer purchases the exclusive right to buy the screenplay for a specific period of time. But purchasing the screenplay is optional, not required (thus the name of the deal). Studios usually don’t actually exercise the option (i.e. buy the script) until the last possible moment, ideally well into pre-production after the film has a green light.

The component terms of an option/purchase agreement are variable, subject to some Guild minimums, but let’s imagine a typical big-studio option deal.

We’ve said the purchase price of our hypothetical script is $500,000. The amount actually paid to option the script could be anything really. In a studio deal, 10% is pretty common. That means in this case the writer would be paid $50,000 against the purchase price. The usual period for such an option is one year. If the studio wants to acquire the script in that year, they pay off the remainder of the purchase price, in this case $450,000. If they don’t, the writer gets the script back and keeps the $50,000 (this is the benefit of the option concept for the writer).

Frequently option agreements contain a renewal clause where the studio can renew the option for an additional year for $50,000 more. This second payment is not typically against the purchase price, though. So if the studio buys the script in the renewal period, the writer would make $550,000 total. If they renew and don't buy, the writer gets $100,000 and regains possession of the script at the end of two years.

Remember, all this is negotiable. The option payment doesn’t have to be 10%. Independent producers will frequently want a “free option.” They aren’t really free because for a contract to be valid both sides have to receive something of value. So the writer is paid a dollar or maybe ten dollars. This gives the producer the right to shop the script for the period of the option without worrying someone will do an end run around him.

If you do a free option, it’s best to keep the option period short – maybe six months. If a producer can’t do anything with the script in six months, they probably can’t do anything in a year. Free options often contain renewals, but usually the renewal requires a bigger payment – perhaps 10% of the purchase price. If the producer has successfully raised some interest during the first option period, they'll be willing to pay to extend the option.

But for the hypothetical we’ll assume our guy got his $50,000. Not too bad, right? But he doesn’t get to take that home. First he has to pay commissions. His agent will get 10%, or $5,000. His manager will most likely also get 10% - managers’ commissions are variable, but 10% is typical for writers. So there goes another $5,000. The writer’s attorney is a bargain at a typical 5%, or $2,500. WGA dues are 1.5%, or $750. Many new writers get upset about paying Guild dues, but when you get a residual check or free health care you realize dues are worth it.

That leaves $36,750 for the writer. Of course, he has to pay taxes on that. Taxes tend to be high for this kind of income. Working screenwriters generally form loan out corporations to help reduce the tax hit. Loan out corporations are legal entities that receive payment and then “hire” the writer so as to spread out their income over the course of a year, rather than having it hit in big chunks. They also have advantages for creating pension plans and a few other things. Your accountant will help you set up your loan out corporation when you need it (you’ll have to pay the accountant for this service, of course, along with annual fees and taxes for maintaining the loan out corporation).

Let’s say our writer is going to pay 30% in taxes on his income. He’ll be left with $25,725. If he's been temping or waiting tables to make ends meet while he writes, he will certainly welcome a check of this size. But it’s a far cry from a million dollars.

Of course maybe the studio will pick up the option. Maybe they’ll make the movie and the writer will get sole credit. Maybe it will gross hundreds of millions of dollars and he’ll get all his bonuses. (He’ll still pay commissions and taxes on all of that, of course.) Then those beautiful residuals will start to roll in. But he might not want to buy a Ferrari counting on all of that happening.

And of course when you’re starting out you most likely won’t get a million dollar deal, anyway. If you run the same numbers with a $100,000 sale price, the writer keeps $5,145 of the option payment.

Depressed yet? Don’t be. Working screenwriters get paid pretty well. You just have to understand that you are not a corporate employee, you’re a small business. You have to manage your revenue properly. That means understanding contracts and commissions and loan out corporations. (Also, obviously, you shouldn't count on retiring on one script.)

There’s another way the writer might earn money from this sale. Often, especially if they have good representation, the writer will be hired to rewrite their script. Next post I’ll describe how those deals work.

(Note: always consult an attorney before signing a contract for writing services.)